“Then if there is a contribution, again you need a double step, and to reference how much of the exchange is being made by contribution.”

Dunn said this piece of the ruling is now substantially different to what it was initially, and therefore is of great importance.

“The fact that if there is a shortfall from an expenditure curve, because it can be from an NALI point of view, we're not looking at deductible expenditure, we're looking at capital expenditure and expenditure ordinarily, that we can, in essence, blow this up. That would ultimately taint this from both an ordinary and also statutory income point of view,” he said.

Tim Miller, head of education and technical for Smarter SMSF, said the updated ruling can also be very confusing for trustees.

“What this update does is tightens up the requirements around those non-cash based contributions that occur in the industry and it didn't really make any significant changes around things like the value-add piece or the improvement part of it,” Miller said.

“What it might have done is tighten up people's practices around that, so pay for the service rather than treat the increase in valuation as a contribution. I think that there's some clarity to come out of that.

“But what it did was it took the piece around in-specie contributions, which had always effectively been you've got to transfer, you've got beneficial ownership, and you've got a key point there where the difference between what you pay and the difference between valuation was always treated as a contribution, and there was really, to me, never any mischievous mischief in that.”

He continued the ATO view is now that where there's a difference between the transfer, the value of an asset from a contract point of view, and the valuation at that time, that would invoke non-arm's length income of a specific nature, because “you're not paying full tote”.

Miller added that confusion arises for trustees as the update talks about what is an in-specie transfer, and about the process of transferring where there's no consideration paid, and transferring it at market value.

“And then basically says the same thing. However, this isn't an in-specie contribution, but will still be treated as an in-specie contribution and will trigger NALI,” he said.

“It comes down to the wording around contracts. It's one of those things where you’re, either all in from a contribution point of view, and then the entire value is that contribution and you document that, or you're all in from a purchase point of view, and then you're paying market value, and where you've got the two combined, you've got to be very careful with your wording.”

Dunn said the other important issue within the update ruling again aligned with the NALI ruling and dealt with the provision of free services for those “wearing their trustee hat”.

“Then you actually don't have a contribution that arises. Therefore, we've seen some further clarification of that,” he said.

Miller said this will ultimately come down to the willingness of auditors to accept transfers, off-market transfers particularly, at face value.